Court reduces Insurance payout to ZERO after it was found that the policy holder lied.
The Policy holder built a home on a property he owned, they insured the property with Chubb Insurance from December 2010 to December 2011. The house was poorly built and had structural defects that Kalabakas failed to inform the insurer of.
They then renewed the policy for December 2011 to 7 December 2012, the house and contents were damaged by fire on 6–7 July 2012.
Chubb Insurance declined the claim under the renewed policy on basis of fraudulent misrepresentations and non-disclosures by Kalabakas pursuant to s28(2) Insurance Contracts Act 1984 (Cth) – ss21(1), 26 & 28.
HELD : Kalabakas failed to disclose four relevant matters to Chubb insurance, this was deemed fraudulent and Chubb was entitled to avoid renewed policy pursuant to s28(2) or to reduce its liability to nil pursuant to s28(3).
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